EDITOR'S NOTE
Bubble warnings have been getting louder and louder in the markets during this historic year, and one seems to have burst at the end of the first half.
Just on May 7, lumber prices soared to a record high of $1,670.50 per thousand board feet on a closing basis, more than six times higher than their pandemic low in April 2020. The quick reversal of lumber's monthslong rally came as Americans started to go on vacations again amid the economic reopening instead of taking on renovation and building projects. Many who are fearful of persistent inflation also took comfort in the drastic decline in prices in the face of cooling demand.
"This drop suggests that the cause of that inflation—the mismatch of supply and demand—will not last forever," said Brad McMillan, CIO at Commonwealth Financial Network. "As suppliers across industries get their acts together, those shortages will fade, along with the inflation. That looks to be happening for lumber now and will happen for other inputs later."
The stock market also wrapped up an impressive first half of the year. The S&P 500 gained more than 14% during the first six months of 2021 for its best first half since 2019. TOP NEWS
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